China’s Vice-Premier, a powerful central planner, He Lifeng will be meet with US Treasury Secretary, Scott Bessent. Their talks are scheduled to occur in Switzerland from May 9 through May 12. Trade relations between the two countries are at their lowest point in years, complicating such discussions. This tension comes on the heels of the United States’ imposition of unwanted, unilateral, and hefty tariffs. The meetings are all about addressing the administration’s ongoing trade war. Tariffs on Chinese imports have soared to 145%, while China, in turn, has slapped on counter-tariffs of 125%.
Sending He Lifeng for bilateral talks is a signal that China understands these challenges and is balancing them against its own interests. Simultaneously, it recognizes the US industry and consumer appeal. The US Trade Representative, Jamieson Greer, will participate in the discussions, signaling a coordinated effort to navigate the complexities of trade tensions.
Per China’s Commerce Ministry, just reaching this agreement to meet was a sign of progress from the US side’s “serious and responsible” advance to initiate discussions. They implored stakeholders to prioritize these discussions. They intend to address the damaging effects of unilateral tariff actions on both countries and the world at large.
“If the US wants to resolve the issue through negotiation, it must face the serious negative impact of unilateral tariff measures on itself and the world,” – China’s commerce ministry.
Bessent stressed that the talks will focus first on de-escalating conflict and tensions. The goal should not be to hash out an entire, complicated trade agreement right now. He emphasized this fact while delivering a speech on Tuesday.
“We will agree what we’re going to talk about. My sense is that this will be about de-escalation, not about the big trade deal,” – Bessent.
China has emphasized its commitment to “safeguard international fairness and justice” in the upcoming talks. The actual impact Recent statistics show that China’s factory activity shrank in April. This adds chaotic turn to the ongoing negotiations. Analysts credit at least some of this drop to difficulties created by the trade war, including the impact, they say, of collapsing exports to the US.
China’s leaders, for their part, reveal no lack of resolve in this intensifying struggle. They think they can outlast their American counterparts through the economic pain. So far, China has provided tariff exemptions for certain pharmaceuticals, microchips and aircraft engines. They have developed an initial “whitelist” of these goods, but this list has not yet been made public.
The US has been bold in pursuit of closing loopholes that previously allowed low-value goods to enter the country tariff-free. This powerful shift transformed the Chinese economy, producing an estimated $66 billion in 2023. Moreover, the US recently exempted smartphones and certain electrical products from newly introduced tariffs.
Both countries are preparing to host these important discussions. There remains a high degree of uncertainty about their capacity to successfully address the complicated narratives as debates begin to start on their appropriation. This is why both sides know what’s at stake. These meetings may be the go-no-go point that determines whether US-China trade relations take an improved direction.